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Reasons Why Investors Should Consider Buying RLI Stock Now
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RLI Corp. (RLI - Free Report) has been favored by investors on the back of a compelling product portfolio, rate increases, improved retention, higher premium receipts and sufficient liquidity.
Optimistic Growth Projections
The Zacks Consensus Estimate for RLI’s 2024 earnings per share indicates a year-over-year increase of 12.1% from the consensus estimate of 2023. The consensus estimate for revenues is pegged at $1.63 billion, implying a year-over-year improvement of 15.3% from the consensus mark of 2023.
The consensus estimate for 2025 earnings per share indicates a year-over-year increase of 4.9% from the consensus estimate of 2024. The estimate for 2025 revenues is pinned at $1.78 billion, implying a year-over-year improvement of 9.1% from the consensus mark of 2024.
Earnings Surprise History
RLI has a solid track record of beating earnings estimates in three of the last four quarters while missing in one, the average being 137.08%.
Zacks Rank & Price Performance
The company currently carries a Zacks Rank #2 (Buy). In the past year, the stock has gained 10.3% compared with the industry’s growth of 34.4%.
Image Source: Zacks Investment Research
Business Tailwinds
Product diversification across the Casualty, Property and Surety segments of the company has fueled the insurer’s growth and financial success. The Casualty segment continues to gain from an expanded distribution base in personal umbrella and rate increases.
The commercial property business has been gaining from higher wind and earthquake exposure rates. Rate increases, improved retention and new opportunities in the inland marine space should benefit marine products.
The Surety segment continues to benefit from its compelling product portfolio, growth within existing accounts and writing of bonds with new customers. Building materials inflation and new accounts will aid commercial and contract surety businesses in the future. RLI boasts solid operating results and its financial position remained strong. Operating cash flows should gain from higher premium receipts.
The insurer has a sound capital structure, helping it meet the interests of its policyholders, enhance operations in the insurance sector and aid growth in its book value for the long term. The company’s return on equity was 28.1% in 2023, expanding 270 basis points year over year. Such a robust capital position provides significant financial flexibility to the operating subsidiaries.
RLI has been paying dividends for 187 consecutive quarters and increased regular dividends in each of the last 48 years, witnessing an eight-year (2016-2023) CAGR of 3.9%. In addition, the insurer has also been paying special dividends since 2011. The recent approval of $2 in special dividend in November 2023 marks the 14th straight special dividend. The company has $87.5 million of remaining capacity from the repurchase program.
Other Stocks to Consider
Some other top-ranked stocks from the property and casualty insurance industry are HCI Group, Inc. (HCI - Free Report) , Palomar Holdings, Inc. (PLMR - Free Report) and Axis Capital Holdings Limited (AXS - Free Report) . While HCI Group and Palomar Holdings sport a Zacks Rank #1 (Strong Buy) each, Axis Capital carries a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
HCI Group has a solid track record of beating earnings estimates in each of the trailing four quarters, the average being 522.51%. In the past year, HCI has surged 113.3%.
The Zacks Consensus Estimate for HCI’s 2024 and 2025 earnings implies year-over-year growth of 37.9% and 11.6%, respectively, from the consensus estimate of the corresponding years.
Palomar Holdings has a solid track record of beating earnings estimates in each of the trailing four quarters, the average being 11.12%. In the past year, PLMR has rallied 52.4%.
The Zacks Consensus Estimate for PLMR’s 2024 and 2025 earnings implies year-over-year growth of 16.2% and 18%, respectively, from the consensus estimate of the corresponding years.
Axis Capital has a solid track record of beating earnings estimates in each of the trailing four quarters, the average being 102.57%. In the past year, AXS has gained 21.3%.
The Zacks Consensus Estimate for AXS’ 2024 and 2025 earnings implies year-over-year growth of 3% and 10%, respectively, from the consensus estimate of the corresponding years.
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Reasons Why Investors Should Consider Buying RLI Stock Now
RLI Corp. (RLI - Free Report) has been favored by investors on the back of a compelling product portfolio, rate increases, improved retention, higher premium receipts and sufficient liquidity.
Optimistic Growth Projections
The Zacks Consensus Estimate for RLI’s 2024 earnings per share indicates a year-over-year increase of 12.1% from the consensus estimate of 2023. The consensus estimate for revenues is pegged at $1.63 billion, implying a year-over-year improvement of 15.3% from the consensus mark of 2023.
The consensus estimate for 2025 earnings per share indicates a year-over-year increase of 4.9% from the consensus estimate of 2024. The estimate for 2025 revenues is pinned at $1.78 billion, implying a year-over-year improvement of 9.1% from the consensus mark of 2024.
Earnings Surprise History
RLI has a solid track record of beating earnings estimates in three of the last four quarters while missing in one, the average being 137.08%.
Zacks Rank & Price Performance
The company currently carries a Zacks Rank #2 (Buy). In the past year, the stock has gained 10.3% compared with the industry’s growth of 34.4%.
Image Source: Zacks Investment Research
Business Tailwinds
Product diversification across the Casualty, Property and Surety segments of the company has fueled the insurer’s growth and financial success. The Casualty segment continues to gain from an expanded distribution base in personal umbrella and rate increases.
The commercial property business has been gaining from higher wind and earthquake exposure rates. Rate increases, improved retention and new opportunities in the inland marine space should benefit marine products.
The Surety segment continues to benefit from its compelling product portfolio, growth within existing accounts and writing of bonds with new customers. Building materials inflation and new accounts will aid commercial and contract surety businesses in the future. RLI boasts solid operating results and its financial position remained strong. Operating cash flows should gain from higher premium receipts.
The insurer has a sound capital structure, helping it meet the interests of its policyholders, enhance operations in the insurance sector and aid growth in its book value for the long term. The company’s return on equity was 28.1% in 2023, expanding 270 basis points year over year. Such a robust capital position provides significant financial flexibility to the operating subsidiaries.
RLI has been paying dividends for 187 consecutive quarters and increased regular dividends in each of the last 48 years, witnessing an eight-year (2016-2023) CAGR of 3.9%. In addition, the insurer has also been paying special dividends since 2011. The recent approval of $2 in special dividend in November 2023 marks the 14th straight special dividend. The company has $87.5 million of remaining capacity from the repurchase program.
Other Stocks to Consider
Some other top-ranked stocks from the property and casualty insurance industry are HCI Group, Inc. (HCI - Free Report) , Palomar Holdings, Inc. (PLMR - Free Report) and Axis Capital Holdings Limited (AXS - Free Report) . While HCI Group and Palomar Holdings sport a Zacks Rank #1 (Strong Buy) each, Axis Capital carries a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
HCI Group has a solid track record of beating earnings estimates in each of the trailing four quarters, the average being 522.51%. In the past year, HCI has surged 113.3%.
The Zacks Consensus Estimate for HCI’s 2024 and 2025 earnings implies year-over-year growth of 37.9% and 11.6%, respectively, from the consensus estimate of the corresponding years.
Palomar Holdings has a solid track record of beating earnings estimates in each of the trailing four quarters, the average being 11.12%. In the past year, PLMR has rallied 52.4%.
The Zacks Consensus Estimate for PLMR’s 2024 and 2025 earnings implies year-over-year growth of 16.2% and 18%, respectively, from the consensus estimate of the corresponding years.
Axis Capital has a solid track record of beating earnings estimates in each of the trailing four quarters, the average being 102.57%. In the past year, AXS has gained 21.3%.
The Zacks Consensus Estimate for AXS’ 2024 and 2025 earnings implies year-over-year growth of 3% and 10%, respectively, from the consensus estimate of the corresponding years.